A prominent housing economist had declared the U.S. housing market is “stuck and we are not convinced it will become unstuck” until at least 2026 or even later.
In an interview with CNN, Michael Gapen, head of U.S. economics at Bank of America (NYSE:BAC), insisted home prices will remain elevated and could even rise higher while a shortage of inventory will remain. Gapen added that even if the Federal Reserve gets around to cutting interest rates, mortgage rates will not decrease substantially.
“This will take many years to work itself out – there isn’t a magic fix,” said Gapen. “The message for first-time homebuyers is one of patience and frustration.”
Gapen stated the current market environment is also being shaped by an economic anomaly.
“It’s been a weird combination,” he continued. “Mortgage rates rose substantially but so did home prices. That typically doesn’t happen.”
Gapen also noted the situation is being exacerbated by a higher-than-normal number of homeowners who are reluctant to sell their properties.
“Why would I sell unless I have to?” said Gapen. “Prices have gone up and the mortgage rate is a lot higher. So, I’m content to stay where I am.”
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LOL, BOA is a radical progressive corporation that is part of the Party that created this mess. BOA is as evil as it gets. Welcome to what Orwell warned us would happen.
Why can’t you simply state your opinion instead of slandering someone else’s opinion?
Agreed 100%
I meant agreed 100% with We The People – certainly NOT with Horace.
Drop the damn prices that’s it. They’re up 35% and they’re not going to give people a 40% raise or cut the rates down to 3% with inflation. Drop the prices or keep getting more inventory.
Market forces are at play, though not helped by government regulations inhibiting new building. Homeownership is about 67% in the US and I don’t know any of us that want prices to go down.
The buzzword is Affordable Housing but that cuts both ways. Whether you can you afford the monthly payment is the true measure. So lower prices or interest rates AND higher wages would both help.
Greater supply is needed because demand isn’t going down. Private equity firms buying up tens of thousands of homes as rentals isn’t helping, but tells us something about the value of owning Real Estate.
Equal Rights cuts both ways too. Win or Lose. People come to the US for an opportunity, not a handout. And we forget that our Government actually has NO money that they don’t take from hard working taxpayers, including imigrants who take jobs others dont want. Government needs to get out of the way and let Capitalism work.